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Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore

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Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore

#441

Post by triceratops »

ryandrake wrote: post #418
pc86 wrote: post #285

Earlier quoted context omitted.

The answer is still build more (which you basically admit yourself in your first sentence). Homes skew larger and more expensive precisely because it's so hard to build them so developers need to make more money from each one. The fixed costs per unit are too high, so the ones that need to be lowered or eliminated should be. That will incentive building more units not just more expensive units. You'd see a lot more 1…

Build Moar seems to be too simplistic. There's just too much demand and too much investment capital seeking profit. No matter how much you build, most of the housing supply is going to get sponged up by investors, landlords, and private equity, and the price isn't going to go down. You'd probably have to 4X to 5X the current housing supply to make a dent in prices.

> most of the housing supply is going to get sponged up by investors, landlords, and private equity

To earn a return through renting or appreciation. If there are more houses than buyers returns drop.

> You'd probably have to 4X to 5X the current housing supply to make a dent in prices.

So do that.

Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore

#442

Post by akramachamarei »

supertrope wrote: post #368
hombre_fatal wrote: post #121

Earlier quoted context omitted.

People who are able to restrict housing development (e.g. existing home owners) have too much political power on a topic that shouldn’t be up for a vote.

Imagine if current hospitals could object to opening new hospitals. Or grocery stores could object to competitors getting permits.

> Imagine if current hospitals could object to opening new hospitals

LMAO

They can! It sucks!

https://en.wikipedia.org/wiki/Certificate_of_need

Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore

#443

Post by madars »

ryandrake wrote: post #418
pc86 wrote: post #285

Earlier quoted context omitted.

The answer is still build more (which you basically admit yourself in your first sentence). Homes skew larger and more expensive precisely because it's so hard to build them so developers need to make more money from each one. The fixed costs per unit are too high, so the ones that need to be lowered or eliminated should be. That will incentive building more units not just more expensive units. You'd see a lot more 1…

Build Moar seems to be too simplistic. There's just too much demand and too much investment capital seeking profit. No matter how much you build, most of the housing supply is going to get sponged up by investors, landlords, and private equity, and the price isn't going to go down. You'd probably have to 4X to 5X the current housing supply to make a dent in prices.

>You'd probably have to 4X to 5X the current housing supply to make a dent in prices.

Not at all. The important thing here is that price is set on the margin. Relatively modest supply increases can have outsized price effects. As an example, consider rents in Austin - something like 30% housing stock increase led to 16% drop in median rent, all while Austin simultaneously had massive in-migration, i.e., rents fell despite demand surging.

As another example of margin behavior: vacancy rates matter a lot, a modest vacancy rate increase can crater rents, which we see in the CRE market.

Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore

#444

Post by littlexsparkee »

bellowsgulch wrote: post #424
littlexsparkee wrote: post #309

Earlier quoted context omitted.

I don't know that this would help the market all that much - these are often informal units, not up to code (and not cost effective to remedy), overcrowded (meaning fewer units made available than population share would suggest would come onto the market), and in neighborhoods outside of the core

I don’t know where you live, but in cities with millions of people in the southwest this is not even remotely true.

Makes sense - talking about the Bay Area so definitely different land dynamics

Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore

#445

Post by lostmsu »

zugi wrote: post #265
jader201 wrote: post #180

Earlier quoted context omitted.

Of all the jobs to get replaced by AI, I would be happy to see realtors to be first in line (but I also think this is wishful thinking). I feel like I get very little value out of what seems to be a mostly fixed/required price. I know flat fee realtors exist, and if/when we sell our home, I’ll be looking into this heavily. But I feel like they rank up there with car salespeople/dealers.

I used a discount buyer's agent and it worked great! We viewed houses on the internet ourselves, went to open houses ourselves, and arranged showings with seller's agents ourselves. Once we had it narrowed down to two houses, we brought our buyer's agent to look at both houses, offer suggestions, and do all the bidding and purchase paperwork. The realtor cartel still enforced a 6% commission, with half to the seller'…

I did the same and outright offered 3% less and did not invoke buyer's agent at all.

Also when I sold my house (> 1M USD) 2 years ago I used $100 flat fee listing service and outright refused to pay anything to buyer's agents.

Both transactions went well.

Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore

#446

Post by insane_dreamer »

this chart in the article has got to be the most confusing ever:

"Map showing the affordability decline by state as costs of living outpaced wages"

so a + is an increase in affordability as the title indicates (wages outpacing COL), or + is a decrease in affordability aka an increase in non-affordability (COL outpacing wages)

https://na.rdcpix.com/a19175a2a7e40c2a2272c013b8b3458aw-c174...

Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore

#447

Post by WarmWash »

beej71 wrote: post #425
amazingamazing wrote: post #289

Earlier quoted context omitted.

We are talking about America. In your case housing would be even higher if it were not built. People continue to make things more complicated than it is. Build, and keep building until it is cheap. Also, you would need to consider the specific places.

The claim is that if you increase supply the price will drop. The counter-example is a case where supply was increased and the price doubled. The question is why did that happen? It very much looks like the "just build" model is insufficient to explain what's happened in that case.

Because demand outran the supply. Prices drop when demand falls below supply. Not when new supply is added.

Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore

#448

Post by eudamoniac »

estearum wrote: post #44
whoknowsidont wrote: post #20

Landlords are the least productive class in society, and it's not even close in terms of ranking.

It's worth being precise about this because it's a really important point. Most people who we call "landlords" are simultaneously a landlord and a property manager. Property management is an important and productive job. But the vast majority of such people's financial outcome is actually from being a landlord , that is doing literally nothing except holding a piece of paper granting them monopoly on a plot of land.…

Why is the landlord being unproductive relevant? If the government owned the land, they would never sell the land, so the concept of land appreciating doesn't exist. The only difference is that the government would possibly rent at-cost, but the profit margins for landlords are not the main factor driving up rent. Get rid of landlords and the rent prices would decrease only very slightly.

Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore

#449

Post by antisthenes »

amazingamazing wrote: post #174
throwaway041207 wrote: post #158

Earlier quoted context omitted.

In my neck of the woods (New England), home prices have doubled since March of 2020. I have yet to read a comprehensive overview of how this happened and how we get out of it. Of course, people went nuts offering over the asking price when interest rates were super low so I understand, to some degree, that baselines were reset. But the current housing market doesn't feel sustainable. I don't understand how a proper m…

It is very simple. Housing is not built.

Yes, great. Now ask the "why" housing is not being built.

And then ask the next "why".

Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore

#450

Post by hereme888 »

staticman2 wrote: post #153
hereme888 wrote: post #88

[flagged]

For context, you just linked to a HUD.gov article that cites its source as fox news.

It clearly says it's an HUD report. They simply posted a relevant video talking about the report on Fox.
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